I recently saw a pack of new Twix Caramel Slices in store. A multipack of six individually wrapped ‘millionaire shortbreads’ which are in fact co-branded Twix and McVities.

Now while I can see why the brand fits (not too difficult given they are both Twix and these slices are made of caramel, shortbread and chocolate), why it’s a logical extension for Twix (to try and move  into cakes) and why McVities wants to try and harness the power and appeal of the Twix (it’s brand lacks the modernity and youthful appeal of Twix) – it still came across as a big “so what”!

The product is nothing new and there are many competitors out there (in fact some of which I would say deliver a better eating experience and are much better value for money given the small size of the slices) – in short it was an extension that is relevant and credible but didn’t offer a point of differentiation: a reason why I should really change to Twix

At The Value Engineers we often talk about the two extremes of brand extension

- Sweating your assets – short-term tactical moves often into established markets that ‘milk’ your brand equity

- Swotting your assets – longer-term more strategic moves into new and/or growing sectors to build your brand equity

…and needless to say I think this is a classic example of sweating your assets!

One of the interesting points that SABMiller’s bid for Foster’s has brought to the foreground is the complicated ownership of the brand. The ultimate brand owner is indeed Fosters but the rights to the brand are owned by a number of different brewers around the world. Heineken owns the brand in many European countries (UK, France, Germany, Ireland, Poland, Spain, Italy, Romania, Czech Republic) as well in the Ukraine and Vietnam. Suntory own the brand in China, Carlsberg owns it in China and SABMiller owns it in India. The brand is licensed to Molson in Canada and to SAB Miller in the US.

Not too surprisingly the different brewers’ position the brand as they see fit in the countries where they own the brand, and so it has a variety of different positionings  across the world.  This raises interesting questions about the oft-made assumption that the best approach for a brand is one global positioning, which is one of those unwritten laws of marketing.

And whilst thinking about who owns what brand I’m reminded of one of my favourite examples from the past of different brands with the same positioning. A few years back before Unilever sold the brand – it owned Birds Eye (and Captain Birds Eye) in the UK where it competed with Findus.

In Italy Unilever’s frozen food brand, through which it sold many of its leading products like fish fingers, was Findus and of course they had Captain Findus!

In celebration of our 25th birthday, we have been publsihing a 25 themed blog post on the 25th of each month.  In our 6th edition, Gavin Galloway takes us back to some of the most promising FMCG innovations of 1986 – which have survived the test of time, which haven’t and what can we learn from them?

1986 was 25 years, or a quarter of a century ago; it was a time of extreme ferment and polarised emotions; it was a time of opportunity.

POLITICS

Mrs T is getting fully into her stride; UK and France announce plans to construct a tunnel under the Channel;  Jeffrey Archer resigns as deputy leader of the conservative party over allegations concerning “ladies of the night”

ECONOMY

The economy is growing; unemployment is running at over 3 million; Nissan begins car production at a new factory near Sunderland; economists warn that a new global recession is approaching (they were right, but 5 years too early).

PEOPLE

Prince Andrew marries Sarah Ferguson; Alex Ferguson is appointed manager of Manchester United; famous sculptor Henry Moore dies aged 88;  Phil Lynott, lead singer of Thin Lizzy, dies from multiple organ failure – the result of heavy drinking and substance abuse.

 EVENTS

“Big Bang” financial deregulation; Maradonna’s “hand of god”; GSCE replaces ‘O’ level; the Metro Centre, Europe’s largest shopping complex, opens near Newcastle; the first case of BSE is reported; the Christmas Day edition of Eastenders is watched by an audience of 30 million; Sir Cliff tops the charts with “Living Doll”; the Sun alleges that comedian Freddy Starr ate a live hamster.

So that was the state of the nation in 1986; but what was going on in the world of FMCG innovation?

Here are the “FMCG Innovation Top 20” for 1986 (the year The Value Engineers began operation), as published by SuperMarketing magazine:

Sadly, we have to report that to the best of our knowledge only 6 of the original 20 have a significant presence on the supermarket shelf in UK 2011. The 6 winners are highlighted in blue.

Survival is tough : 30% overall survival rate over 25 years among products picked by experienced grocery buyers as the best of the crop.

Next, we will look more closely at the winners and losers…

For our purposes a “winner” is simply a brand/product from the 1986 list of top innovations that has survived up to the present; the “losers” are the rest – consigned to the dustbin of marketing history.

Looking across the listing, a number of factors stand out:

• Substantial number of new brands and major sub-brands : new brands – Options, Delight, Wisk, Hippo, Mighty White, 54321; major sub-brands – Hob Nobs, Menu Master, Natural Choice, Biarritz
• New brands are from large organisations (Options excepted) – in contrast to the current situation where new supermarket brands are often niche players (GU, Dorset Cereals, Tyrrells etc )
• The winners come from global megacorps (P&G, Unilever, Coca Cola) or from small organisations (Premier Brands, Wander)
• In contrast the losers have a substantial component of large UK organisations that lacked global scale – RHM, United Biscuits, Northern Foods, Cadbury-Schweppes, Beecham. It is perhaps significant that of these only Northern Foods still exists as an independent entity (at time of writing)
• There is evidence of over-complex branding : Birds Eye Steakhouse Prize Steaks, Brooke Bond PG Tags, Maxwell House Master Blend

This may well have been a contributory factor in the failure of these offers.

Next we will look more closely at the winners, to try to unpick the secrets of their success…

We often talk about how brands use disruption to their advantage; from disrupting a category to provide consumers with a new and different set of benefits and values associated with existing products / services to disrupting our mindsets through cut-through communications, brands often seek to gain our attention and interest through causing us to sit up and take note of something different.

How does your brand disrupt consumers’ daily lives in a good way? Is its role a category disrupter or a leader? We can help you define its role within the marketplace and against its competitive set to use positive disruption to its advantage.

• ‘To celebrate disruption is to celebrate original thinking; long live the disruptors and rebels, for they are those who lead and not follow!’ – Anon
• ‘Brand disruption changes expectations of the product category to make customers find your brand more appealing which, in turn, will help you attract more business’ – Claire Dally
• ‘Brand disruption without careful preparation of the initial conditions will often give people the experience of short-lived confusion rather than deep and lasting astonishment’ – Stuart Nolan
• ‘Cause as much chaos and disruption as possible but don’t let them take you alive’ – Sid Vicious
• ‘It’s always a disruption when you change’ – Jerry Mitchell

Borrowed with pride from all over the place.

Today is the day when America’s National Hockey League (NHL) conducts its annual entry draft. The 30 North American clubs that make up the league will select junior players to join the premier league in international hockey.  The teams make their selections over 7 rounds based on the position they finished in the previous season. This is portfolio management NHL style.

Each team has a different strategy and will draft players depending upon the needs of their team. The process of selection is long and rigorous. Scouts will have viewed the potential prospects many times over the preceding years and will have assessed their key hockey attributes; skating ability, stature, vision, hockey sense. Once these reports have been compiled, the intangible elements are also assessed with a similar rigour; attitude, work ethic etc.

Does the process work? Reviewing the 30 first round picks in each year from 2000 to 2005; on average 8% will not play in the NHL whilst 59% will go on to have a substantial NHL career.  

This is a 60% NPD hit rate, way in excess of the poultry 10% ration frequently cited in consumer goods industries.  There are obviously lessons for us all in the NHL play book so here are our top 5:

• Product lifecycle management is key: understand your current  portfolio and when existing products are likely to decline in performance so that you can develop new products that can take over
• Take the long view; develop for where you want to be, not where you are now, and recognise that development takes time
• A portfolio perspective is essential; not all new products will become an “all-star”, develop products to strengthen the overall portfolio
• Take multiple views of the new product in testing to obtain a complete picture; consumer, brand and your own employees
• And always consider the competitive context